Base metals prices on the London Metal Exchange were little changed on the morning of Tuesday March 29, while on the Shanghai Futures Exchange, nickel was down and the rest were firmer – this despite concerns about lockdowns affecting demand.
* Despite low volumes and concerns about China’s lockdowns, the base metals generally look upbeat.
* LME three-month nickel seems to have found a price level either side of $33,000 per tonne
Base metals
Three-month base metals prices on the LME were mixed and generally little changed with aluminium ($3,627 per tonne) up by 0.6% and copper ($10,328.50 per tonne) down by 0.3%, while the rest, with the exception of nickel, were down by 0.1%.
Volumes on the LME were light with just 1,994 lots traded as of 6.40am London time, generally at this time of day we would expect around 5,000 lots to have traded.
The most-traded contracts on the SHFE were mainly firmer this morning, the exception was May nickel that was down by 5.6% at 220,910 yuan ($34,661) per tonne, which would imply an international price of around $30,690 per tonne. The rest were up by an average of 1%, led by a 1.8% rise in May tin, while May copper was up by 0.7% at 73,530 yuan per tonne.
Precious metals
Precious metals were little changed to firmer this morning, with gold at $1,922.87 per oz, silver up by 0.2% at $24.91 per oz, platinum up by 0.5% at $987.50 per oz, while palladium was up by 2.4% at $2,287 per oz.
Wider markets
United States 10-year treasuries yields were firmer this morning and were recently at 2.47%, compared with 2.37% at a similar time on Friday.
Asia-Pacific equities were mainly firmer this morning: the Hang Seng (+0.8%), the Kospi (+0.42%), the Nikkei (+1.1%) and the ASX 200 (+0.7%), while China’s CSI 300 (-0.16%) was bucking the trend.
Currencies
The US Dollar Index was consolidating in high ground this morning and was recently at 99.01, compared with Monday’s close at 99.15 – the recent highs have ranged between 99.37 and 99.42. A break higher would put 104 in focus.
With the dollar is in high ground consolidating, the other major currencies were mixed: the euro (1.0994), sterling (1.3103) and the Australian dollar (0.7505), while the Japanese yen’s (123.46) has bounced off the recent low of 125.09.
Key data
Economic data already out showed Japan’s unemployment rate dipped to 2.7% in February, having been 2.8% in January, Germany’s Gfk consumer climate index fell to -15.5 in March, from -8.1 in February, and German import prices climbed by 1.3% month on month in February.
Later there is data on the United Kingdom's M4 money supply and lending, with US data on house prices, job openings and consumer confidence.
In addition, US Federal Open Market Committee member John Williams is scheduled to speak.
Tuesday’s key themes and views
The base metals are generally holding up well and dips are being well supported. More severe lockdowns in China could well hit demand, but likewise are likely to affect production and logistics as well. While the metals are finding support now, markets may start to get nervous about the high energy prices weighing on economic activity that would weaken the demand side of the equation.
Gold prices have become quite volatile but are generally holding up well if you ignore the early-March spike higher. Bond market weakness and inflation are likely to provide support, but if there was any movement toward a settlement over Ukraine then gold prices would likely head lower.